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GLOSSARYTERMS AS A CREDIT DESK USES THEM

Evergreen facility

What is an evergreen facility, and how is it different from evergreening?

ONE OF 366 TERMS · FREE · NO SIGNUP

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED

// THE SHORT ANSWER

An evergreen facility is a revolving or overdraft facility that renews automatically, usually each year, unless the bank or the borrower gives notice that it will not, often a set number of months ahead. Some versions keep a constant remaining term by extending the maturity a year at each anniversary. For the borrower it removes a fixed refinancing date; for the bank it makes the annual review the real decision point, because a renewal nobody stops is another year of commitment. A notice of non-renewal starts the borrower's countdown to find other funding.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.

// WHAT IT IS NOT

Evergreening is rolling or topping up a weak loan so a problem stays hidden; an evergreen facility is an ordinary structure that renews on its own terms. The names are close and the meanings are not.

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FACILITIES AND THEIR SHAPE

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